Advantest Corporation SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Increased applications of semiconductors due to IoT devices: Currently the semiconductor demand is not only driven by PCs and smartphones but also driven by new IoT devices. These devices come with automobiles, home appliances and industrial applications. The rapid proliferation of such devices necessitate the use of high-performance semiconductors. This increases the testing required for semiconductors. Unlike previous short-lived boom in the semiconductor market, today the demand is expected to be rising in the medium term. Also, the common use of devices has given Advantest the chance to benefit from its ability for mass production of the test equipment needed. Advantest needs to create an ecosystem that caters to various IoT applications. It needs to innovate the testing equipment. IoT devices will bring revolution to the semiconductor industries, Advantest Corporation needs to adapt its strategies to take advantage of this growth.

2. Increased data volumes leading to high semiconductor demand: 5-G millimeter wave technology is revolutionizing internet applications. Internet is a social infrastructure and digitization has transformed the way we do transactions daily. The increased applications of internet have increased the data volumes. Increased data volumes hike the demand for data servers and data processing capability. This ultimately leads to high demand in semiconductors. The performance requirement of the semiconductor devices has also shot up. As per this trend the wafer-level and package-level tests are becoming a part of the module-level tests in high end semiconductors. The miniaturization of computational capabilities has caused disruptions in semiconductor technologies. Advantest corporation must innovate to test the semiconductors for high data computation capabilities. It needs to expand its offerings in the value chain. The medium to long term strategy called ‘Grand Design’ has helped it to take the right steps.

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Use of renewable energy to reduce carbon emissions: Semiconductor testing industry involves intensive use of energy. It is one of those industries that will drive shifting gears towards the next industrial revolution. So, this growing industry will have a huge impact on carbon emissions and climate change. The shift towards renewable energy will help the industry in various ways. First the industry will limit the use of fossil fuels. That will promote the overall electronics equipment industry. Finally renewable energy technologies like photo voltaic cells itself use semiconductors to generate electricity thus increasing demand within the industry. Advantest being one of the leaders in the industry needs to show a global shift. This will help it in operating within the norms set in various countries. Advantest has joined the RE100 initiative that promotes usage of 100% renewable energy. As a part of this initiative, it has already achieved 100% renewable energy powered operations in the USA and Germany. The impact of this transition is estimated to be 30% reduction in carbon emissions of the firm in 2030 over 2018.

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